Tech stocks had a rough couple of days this week, adding more misery to Facebook (Facebook Stock Quote, Chart: NASDAQ:FB) which has seen its share price tumble almost 30 per cent over the past couple of months.

Facebook’s share price troubles came to a head in late July after the company missed analysts’ estimates for second quarter revenue and management predicted an upcoming slowdown in revenue growth over the second half of 2018. The news sent the stock on an historic slide of as much as 24 per cent in one day while at the same time it focused investor attention on the company’s struggles to deal with fake news scandals and data leaks.

It’s the latter, seemingly more intractable issues that have Harris worried.

“I think the bigger issue for them is how do they deal with people going on there and subverting elections and all these things, which they still don’t seem to have a handle on, and I think the privacy issue is very different,” says Harris, partner and portfolio manager at Avenue Investment, to BNN Bloomberg. “It’ll be interesting to see when their numbers come out in the next quarter whether any of these things have had a larger effect on them.”

Harris says that along with concerns over declining user growth, Facebook continues to see personnel departures from acquired businesses, the latest being the exit of Instagram founders Mike Krieger and Kevin Systrom, which follows on similar departures by WhatsApp and Oculus founders.

“You’ve seen a bunch of people leave Facebook over the last little while and I think people are worried about why that’s happening, when people like Instagram leave or the guy from WhatsApp leaves,” says Harris. “There is some management turmoil going on in there. I think people are also worried that Facebook usage is down, even though Instagram usage and all these other things are up.”

Facebook stock under pressure

Tech stocks rallied on Friday but all of the FAANG group of companies ended lower for the week, with Amazon losing 4.6 per cent, Alphabet down 3.4 per cent and Facebook down 1.2 per cent.

Harris says that by comparison, Alphabet’s regulatory hurdles may be less problematic than Facebook’s.

“From a digital advertising point of view, Google seems to be a lot easier to understand, and from a regulatory point of view, Facebook has a lot more issues to deal with than maybe Google has,” Harris says.

About Jayson MacLean

Jayson is a writer, researcher and educator with a PhD in political philosophy from the University of Ottawa. His interests range from bioethics and innovations in the health sciences to governance, social justice and the history of ideas.